Yahoo! buys! into! Chinese! ecommerce! giant!

Chinese web marketplace Alibaba has cut a deal with running dogs of Yankee imperialism Yahoo! in exchange for a cool billion.

Western web giants have failed to replicate their dominant positions in the Chinese market, where the market leaders are all home-grown - so if you can't beat them, buy a stake. Yahoo!'s $1bn investment secures a 35 per cent stake in the company, founded by English teacher Jack Ma in 1999.

Alibaba operates a B2B marketplace, an eBay clone called TaoBao, which boasts 6m users, and a PayPal-like service called AliPay.

Alibaba's CTO John Wu was previously in charge of search at Yahoo!, overseeing its growth from a college dorm directory to the mega portal we know and love today. China's technical talent is making rapid headway in many areas - particularly microprocessors - so the angle-bracket stuff that makes up today's "emerging web standards" should be a cakewalk. But the home grown dot.coms have other advantages.

According to a profile in Forbes this spring, CEO Ma orientates new hires by encouraging them to perform a handstand, because "Ebay looks less fearsome when you're upside down".

See for yourself what the competition looks like through Chinese eyes -

Staff work under posters urging them "Pay any price, do anything, to WIN!", notes Forbes, and at a company party waved flags of worker ants, ending with a joined-hands chorus of a song "You have to go through a thunderstorm to see a rainbow".